5. Estimating Operating Costs

Try these first

1. 1.

   Define operating costs in the context of construction equipment.

   Hint

   Think about costs that change with how much you use the equipment.

2. 2.

   What are consumables?

   Hint

   What items do you need to regularly replace while using machinery?

3. 3.

   What are operating costs?

   • Costs incurred regardless of equipment use
   • Costs incurred only during equipment use
   • Fixed costs associated with equipment ownership

   Hint

   Focus on what 'operating' means in terms of when costs arise.

4. 4.

   True or False: Major repairs form part of operating costs.

   • True
   • False

   Hint

   Consider the scale of repair as you evaluate the answer.

5. 5.

   Calculate the estimated operating cost of a construction site using data from past projects. Your site uses an excavator for 2400 hours with an average fuel cost of $4 per gallon. If the excavator consumes 10 gallons per hour, find how much will you spend on fuel alone?

   Hint

   Break down the components of the total cost and calculate each separately.

6. 6.

   Using the Caterpillar method, analyze the estimated operating costs for both favorable and harsh working conditions. Reflect on how the estimations differ and justify.

   Hint

   Conduct a comparative analysis based on the scenario provided.